Schaumburg Company Agrees To Pay $4.5M In Civil Settlement: DOJ

SCHAUMBURG, IL — Concept Schools agreed Tuesday to pay $4.5 million as part of a civil settlement to resolve allegations that it violated the False Claims Act by engaging in non-competitive bidding practices in connection with the Federal Communications Commission’s E-Rate Program, according to the Department of Justice. The charter school management company's headquarters are based in Schaumburg at 1336 Basswood Road.

The E-Rate Program, created by Congress in the Telecommunications Act of 1996, subsidizes eligible equipment and services to make internet access and internal networking more affordable for needy public schools and libraries, according to a press release from the DOJ.

"Today’s settlement demonstrates our continuing vigilance to ensure that those doing business with the government do not engage in anticompetitive conduct," said Acting Assistant Attorney General Jeffrey Bossert Clark for the Department of Justice’s Civil Division in the statement. “Government contractors and schools that seek to profit at the expense of taxpayers will face serious consequences.”

According to the lawsuit, the DOJ, on behalf of the United States, alleges that Concept Schools rigged the bidding for E-Rate contracts between 2009 and 2012 in favor of chosen technology vendors so that its network of charter schools located in several states, including Illinois, Ohio, and Indiana, selected the chosen vendors without a meaningful, fair and open bidding process. Additionally, the government alleged that Concept Schools’ chosen vendors provided equipment at higher prices than those approved by the FCC for equipment with the same functionality.

In a press release regarding the settlement, Concept Schools said when it became aware of the investigation, it "cooperated fully with the government agencies, and it continued to cooperate throughout the investigation." As a part of the investigation, Concept Schools said multiple agencies closely reviewed a number of Concept’s operations, practices, and functions.

In the release, Concept Schools said it values the insights gained over the past six years and looks forward to moving ahead with its core educational mission.

"We will continue to focus our attention on achieving our mission of providing a high-quality, STEM focused and college-preparatory education for our students, as we move past this investigation and set new precedents for excellence during the current COVID-19 pandemic and beyond," said Christopher Murphy, Concept Schools Chief Growth and Communications Officer, in a statement. "We express our gratitude to our school communities and educational partners for their continued support."

The government also contends that Concept Schools failed to maintain sufficient control over equipment reimbursed by the FCC, some of which was discovered missing.

Contemporaneous with the civil settlement, Concept Schools has agreed to enter into a corporate compliance plan with the FCC, according to the release.

“E-Rate contractors and schools receiving E-Rate funds must understand and know that actions that undermine the contracting process, such as conspiring to rig competitive bidding, will not be tolerated and will be investigated aggressively,” said David L. Hunt, Inspector General of the FCC.

The settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the FCC Office of Inspector General, the Federal Bureau of Investigation, and the U.S. Department of Education Office of Inspector General.

The claims resolved by the settlement are allegations only, and there has been no determination of liability.

Concept Schools said that these allegations of inappropriate conduct have "continued to surface in the media and appear to be part of a concerted effort by foreign actors to discredit Concept Schools and tarnish Concept’s reputation for what we can only believe are politically-motivated foreign policy reasons."

According to the release, Concept Schools serves low-income families with 84 percent of the student body being minority students. It notes that the average graduate rate is 95 percent, with 96 percent of the Class of 2020 accepted into colleges and these students receiving $39.1 million in merit-based scholarships.